Council tax set to rise 2% for millions as local authorities spurn Government grants

Councils are set to infuriate millions of households, as well as government ministers, by hiking council tax bills 1.99 per cent.

More than 40 councils will set their annual council tax rise just short of the 2 per cent threshold at which a vote on the hike would be triggered, according to the Local Government Chronicle

Ministers will point to the fact that a third of local authorities have rejected an offer of extra central Government funding - equivalent to a 1 per cent rise in the tax - which would otherwise have enabled them to freeze bills.

'Democracy dodgers': Eric Pickles has criticised councils for evading the verdict of hard-pressed local voters.

The survey found that more than half of those councils plan to impose a hike of 1.99 per cent - the maximum allowed before town halls have to go to their electorate to seek approval for the council tax level.

Communities Secretary Eric Pickles -
whose desire to halve the cap to 1 per cent was blocked by the Liberal
Democrats - has described town hall leaders who go close to the limit as
'democracy dodgers'.

The LGC received responses from 262 of the 353 councils and found that
speculation over a tighter limit had influenced behaviour. Some 14 per
cent changed their proposals as a result, with half now planning a tax
freeze.

Confirmation of the figures will not come until spending plans have been
approved by council meetings across the country over the coming weeks.

Local authorities face a 2.9 per cent
cut in overall Government funding for 2014/15 - another reduction to
budgets which town hall leaders say are already too stretched to pay for
some important services.

The LGC analysis of council papers
and responses from finance officers showed 31 per cent (82 councils)
planning an increase, with 65 per cent anticipating a freeze and 4 per
cent a cut. Of those not taking up the extra cash, 43 propose a 1.99 per
cent rise and 37 between 1.5 per cent and 1.99 per cent with two
undecided.

About a third (34 per cent) are
Tory-run, 44 per cent Labour and 22 per cent under no overall control or
independent. Britain's only Green Party-led council is planning a
referendum to see if there is local support to raise council tax by 4.75
per cent.

LGC editor Emma Maier said: 'Councils
want to freeze tax for their residents, but many local authorities are
under increasing pressure as a result of cuts to their government grant
and rising demand for their services.

'The fact that so many have chosen to
increase tax by around 2 per cent rather than accept government funding
equivalent to a 1 per cent tax rise is a sign of just how stretched
councils are.'

The Government offer of a small amount of funds to help councils freeze their tax is seen as a short term solution by many local authorities, which think it will not address historic and ongoing budget cuts that leave them unable to deliver services.

The Local Government Association said that funding had been cut by 40 per cent over the past five years which had left many councils struggling to provide care for elderly residents and attend to other essential services.

Many councils proposing a rise in tax say they can no longer balance their books without increasing charges.